Advertising sees better times around the corner

By Paul McIntyre

THE $12 billion media and advertising industries are cautiously flagging signs of life for the new financial year with most predicting the likelihood of tempered year-on-year growth from September.

Commercial TV broadcasters were hit particularly hard in the past six months with figures for the metro TV market due in four weeks expected to show at least $280 million will be lost from broadcasters' advertising coffers for the 2009 calendar year. For the first six months of 2009 the metro TV market is tipped to contract by about 15 per cent.

TV networks are now talking of revenue falling another 7 per cent to 10 per cent for the December half and about 11 per cent for the 2009 calendar year.

"The worst might be behind us and the back end of this six months should pick up slightly," the chief executive of the media buyer OMD, Mark Coad, said. "Things are looking a little brighter but it does depend on the category. Automotive and finance won't be sharing any of the optimism but the clients we're looking at are feeling pretty good. Consumer goods and telecommunications are doing OK at the moment."

Mr Coad said that while radio, online, and pay TV had performed "relatively well" in the first half, magazines, print classifieds and television were hit hard.

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"The biggest issue the TV networks have is they went on an aggressive land grab [price discounting to gain market share] earlier in the year," Mr Coad said. "They're going to struggle with their yields when [advertising] volume does return because of all the cheap deals done in advance."

However, Network Seven's chief sales and digital officer, James Warburton, warned media buyers and advertisers that a rebounding market would challenge some of the heavily discounted prices.

"My feeling is certain sections of the market were unrealistic and they will be caught out," he said. "If demand starts exceeding supply, the networks will proactively manage their yield.

"There's no question the next half is going to see an improvement … a number of categories starting to talk very positively."

Mr Warburton would not identify the sectors likely to spend up in the December half but most in the market say airlines, supermarkets, food companies, the telecommunications sector and the Federal Government are increasing spending.

However, Austereo's chief executive, Michael Anderson, remained cautious. Radio has surprised many with its resilience in the downturn but Mr Anderson was reluctant to proffer a view until the end of July.

"We're not expecting it to get dramatically better or dramatically worse but in reality it's very difficult to see at this point. By the end of July we'll have a better fix on things. I think everyone is allowing the year to unfold."

Clemenger Group's chief executive, Robert Morgan, said the ad market could rise 2 per cent this financial year. "It will be up but it will be pretty marginal. People are still reluctant to spend, particularly on the big ticket items when they're worried about jobs. I think we will see some improvement from September though."